Neutral, non-partisan discourse about security issues created by terrorism.

Tag Archives: motionpictures

It is always interesting, after writing one of my commentaries to see the follow up within weeks and months as the landscape is changing.

Dalian Wanda, a privately held corporation, has gone under an enormous change after I wrote (China’s Trojan Horse in Your Neighborhood—11/14/16) of its massive financial invasion and attempted takeover of American cinema facilities. Wanda’s goal was the morphing from a real estate developer to an entertainment and tourism major world player. His aim was to become the dominant world player with his acquisitions of American cinema chains and production companies. It is that goal that drove his overseas spending binge.

First, there was an outcry from Congress, but that seemed to go nowhere. Then, as one commentator said, the rug was pulled out from beneath Wanda by the Chinese government itself. The question is why? Wanda is headed by the second richest man in China, Mr.Wang. Why would his own government react as they did?

Mr. Wang, who owns Wanda, is held to be one of China’s wealthiest individuals, with a fortune that sits close to $31.4 billion. He is also ranked 18th in the world by Forbes. In China that is a singular achievement. All this achieved in what can be characterized as a country with an enormous bureaucratic government and intense social and economic control — it is China. So what happened? Did Congressional outcry set up a second look by the Chinese government? I doubt it. Was it extraterritorial spending too much of Chinese wealth being utilized outside his own country instead of internal investments? Or simply in the vernacular — was he getting too big for his britches for a very controlling government. He was clearly violating his nation’s investment law, but, none-the-less, he was permitted to continue his overseas investments without interference by his own government.

Then it all seemed to fall apart. His real estate empire is a mere fraction of what it was. You might remember last year, when he visited Hollywood and bragged that Wanda would soon beat Hollywood at its own game, and with the carrot and stick promised generous rewards to those who would work with him. At this moment, at least four of the entertainment deals, including the $3.5 billion purchase of Legendary Entertainment, have already closed. But, and that is a big “but”, the Chinese government’s ban appears to prohibit loans even to those units for day-to-day operations or for restructuring.

At his point, the Chinese Government has played a very open hand, and it was a long time in coming—all to the benefit of the United States. The Chinese government has directed its banks to loan him no more money, even if it means he will default on his overextended investments. As in the movies, in time, he will “fade from the scene” and I predict he will sell off his stakes in Hollywood. From a security point of view: that is very good news.